The average American adult owes $15,706 to credit cards alone and in total, American consumers are £11.8bn in debt. That’s a huge amount of debt – and it’s increasing every year too. A moderate level of debt can be positive, as borrowing responsibly can improve your credit rating, too much debt is usually a sign that people are struggling to make ends meet. Fortunately, there’s a few things you can do to bring down your monthly outgoings and become less reliant on credit to pay the bills.
1. No matter what type of loan or credit card you have, you probably have interest rates on them. Don’t rely on your credit card for day-to-day expenses and always meet the minimum repayment every month to avoid defaulting. On top of that, don’t be afraid to call your lender or credit card company to find out about lowering rates.
2. No one wants to talk about death, but the cost of a funeral is around £3,600 and continues to increase year-on-year. One way to prevent your family being faced with a huge bill when you pass is by paying in advance to avoid rising funeral costs, so you know you’re covered when the time comes.
3. Another unavoidable cost of life is groceries, which can rapidly increase when you are feeding a family. Check out different stores in your area to find out which ones offer the best prices, and make use of the internet to find weekly special offers and deals.
4. You know the saying – the only things certain in life are death and taxes. Take the initiative to start a fund to pay your yearly taxes so you’re not at a loss when they’re due. Instead of getting a glaring bill once per year, you can pay off the sum in quarterly amounts or have it stored away in a bank account.
5. Car repairs are expensive, but they don’t have to be. There are plenty of repairs you can do yourself, but if in doubt, have your car looked at by a mechanic every year. You may think putting off a small repair won’t matter, but it usually results in more damage in the long run, which will cost even more money to fix.
6. Car insurance is yet another fee associated with transport that can actually be reduced. One way to deal with this cost is to shop around for the best rate, or use a price comparison website which does the hard work for you. Another way is to call your car insurance company and negotiate a new monthly rate.
7. If you’re still paying off student loan debt, find out if you are eligible for loan discharge. Even if you go into forbearance for a short period of time, it can help you to get your finances together. Just keep in mind that the interest will likely continue to accrue.
These simple steps can help straighten out your finances before you know it.